Productivity growth is the elixir that makes an economy flourish. Best described as output per worker, productivity grows when workers harness innovation, machinery, experience, and their own skills to produce more in less time. When that happens, historically, society prospers. Workers get paid more because companies are generating more cash and lowering expenses; governments raise more tax revenues because citizens and corporations are more prosperous, and more money is available for the research and education that will nurture the next round of productivity. The so-called productivity miracle of 1997-2003, which was boosted by heavy spending on technology, fostered rapid growth, decent wages, and low inflation.
The crucial role productivity plays makes recent news all the more alarming.
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